Coalfields Expressway Press Conference

Friday, March 28, 2008

Pound Town Hall

Pound, Virginia

          I am pleased to announce today a landmark advance for the Coalfields Expressway, our foremost economic development project  for Wise, Dickenson and Buchanan Counties and the region that adjoins them.

         When constructed, the highway, from Pound through Dickenson and Buchanan Counties to the West Virginia line, will provide opportunities for economic growth and expansion that are currently not available due to the lack of a major highway traversing the region. The potential economic benefits of the road to Southwest Virginia cannot be overstated, and the project enjoys the overwhelming support of our citizens.

          In June of 2005, a significant setback in the project occurred when, because of lack of progress on the project by the public-private partnership that existed at the time, the Federal Highway Administration rescinded its approval of the Special Experimental Projects status (SEP-14) that allowed the use of innovative contracting methods designed to move the project forward quickly and to reduce its cost. 

          Today I am pleased to announce that the Federal Highway Administration at my request and that of Governor Tim Kaine is reinstating Special Experimental project status for the Coalfields Expressway.

          The Federal Highway Administration had initially accorded the special status to the project in May of 2001.  The designation allowed VDoT to use a design-build contracting method for the CFX rather than the traditional competitive bidding process.  The traditional bidding process requires the State to procure bids and award contracts at each stage of a project  - a far more costly and time consuming process than awarding the entire project at one time as allowed under SEP-14.  VDoT had entered into an agreement with a private sector firm to design and build the length of the highway under the terms of a Public-Private Partnership Agreement as allowed by SEP-14.

          By late 2004, it had become clear that under the partnership then in place, the project was moving forward neither in a timely nor in a cost-effective manner.  In fact, the costs had escalated to a daunting projected $4 billion for final construction.  In a letter dated June 2, 2005, to VDoT, Roberto Fonseca-Martinez, the Federal Highway Administration Division Director for Virginia, wrote "Currently the project is significantly behind schedule with no anticipated construction date....  Based on the inability to meet the goals set in your application, FHWA will not continue to participate in this project with Federal funds under the SEP-14 Program." 

           Revocation of the SEP-14 status eliminated the ability to apply federal funding to the project unless traditional contracting methods were used to design and build the road.  The traditional contracting method would inflate even further both the cost and the duration of the project.  Revocation of the SEP-14 status posed a serious threat to the construction of the CFX.   

          At that point innovative thinkers in Southwest Virginia began to develop a promising concept that increased immeasurably the likelihood of constructing the project, and significantly decreasing both the costs and the time frame for construction. Recognizing that the road would be far too costly to construct using traditional contracting methods, Alpha Natural Resources and Pioneer Coal Company, among Virginia's leading coal producers, in 2005 began to explore the potential for entering into an agreement with VdoT to develop a "coal synergy" concept for construction of the road.  Virginia has abundant coal reserves, and both Alpha and Pioneer, which control the rights to the reserves along the route of the road, expressed a strong interest in partnering with the State to begin construction of the Coalfields Expressway as part of their mining operations.  The planned recovery of coal reserves in areas adjacent to the CFX corridor would provide a means of constructing the road bed while coal mining occurs at a far lower cost and more quickly than if the construction were done independent of the coal recovery operations.

          Following long months of study and negotiations by Alpha, Pioneer and VDoT, in February of this year VDoT sent to the Federal Highway Administration a Decision Document that described at length the "coal synergy" method of construction for the CFX and the attendant benefits of this method.  The Decision Document called for VDOT to contract with Alpha and Pioneer for the design and rough grade development of the entire length of the road in conjunction with coal extraction activities. This key document was the basis for FHWA's re-evaluation of SEP-14 status for the project.

          Upon submission of that document and based on the approach it described, I joined with Governor Kaine in asking the federal government to reinstate special experimental project status for the CFX , and today I am pleased to report that the status has been restored.

           The federal decision recognizes that Alpha and Pioneer can dramatically reduce road building costs by preparing the roadbed as coal in extracted.

          In fact, in 2004 construction cost for the CFX was estimated at $4 billion.  The plans submitted by Alpha and Pioneer utilizing "coal synergy" indicate a savings of nearly 50%.  The number of bridges has been reduced from 35 to 7, and the length of the road is lessened from 52 to 50 miles.

           With special federal experimental project status restored, our prospects for construction of the road have never been better. The coal companies will build it quicker, at half the cost with a better design and higher speed limit than if the road were built by VDOT alone.

          I want to thank several key individuals for their role in securing reinstatement of SEP-14 status.  First, I want to express my appreciation to Governor Tim Kaine and Virginia Secretary of Transportation Pierce Homer for their unwavering commitment to the Coalfields Expressway project. 

         I also want to express my gratitude to Alpha Natural Resources and to Pioneer Coal Company for their clear dedication to the best interests of our region.  Their leadership and assistance in this project have been instrumental, and without them we would not be where we are today.  I want to thank Southwest Virginia's Legislative Delegation for their hard work and efforts at the State level on behalf of the CFX. My Senior Advisor for Policy, Becky Coleman, deserves our thanks for her many hours of constructive work in support of the acquisition of federal special project status.

          And I want to say a special word of appreciation to the individuals at VDOT, both in Bristol and in Richmond, who worked long and hard preparing the information needed by FHWA to reinstate SEP-14 status, and to the individuals at FHWA who worked closely with VDOT to assure a speedy and favorable review of the Decision Document.

          Today's announcement is the first in what I hope will be a series of announcements in the near future regarding the collective efforts of state and federal officials in our region to build this much needed addition to the region's transportation infrastructure.